Giving Compass' Take:
- Here are tips and insights for women thinking of becoming venture investors and how they can push gender equity forward in the sector.
- How can female-led investments help address gender-based social issues and increase female visibility in the field?
- Read how women and men approach impact investing.
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Like all investment strategies, venture investing carries risk, but, in my experience, it is one of the best ways to get outsized gains and a critical part of a diversified investment portfolio. It is a good long-term strategic allocation in a portfolio and can be a hedge against long-term volatility. Yet, in my experience, many qualified women are not told by their wealth management advisors that venture investing could be a way to build their wealth. This excludes women from a great opportunity to grow personal assets and contribute to the future success of companies that will impact our future. I have also seen firsthand how it is a great career and brand builder—a power play.
I predict that the next two years will bring incredible opportunities for investment into companies that will emerge as high-growth and even unicorns in the wake of the market volatility we are currently experiencing. The need to make course corrections to ride the tide of the economy often spawns new opportunities. Indeed, closely following the 2008 recession, hundreds of thousands of new U.S. companies were started, including many that are now household names, such as Airbnb, WhatsApp and Slack.
Last year, How Women Invest—the sister organization of my company, How Women Lead—reviewed nearly 500 investment opportunities involving companies in their first or second year of existence. And the pace is not letting up. Marry that fact with the fact that VCs did better than stock market investors during the last two recessions, and we have a confluence of factors that make investing in startups particularly attractive right now.
The prospect of vetting opportunities and negotiating sound valuation terms takes skill and network power. In my experience, investing well as an individual is very hard to do. When becoming an investor with early-stage startups, focus and risk mitigation is important so that you can move quickly to assess and invest with confidence. To invest in startups with confidence, a key strategy is to join a fund that is focused and managed for expedient, informed investing decisions.
Read the full article about female venture investors by Julie Castro Abrams at Forbes.